Times Union staff photo by Lori Van Buren -- Mitchell Khosrova, Associate Counsel with NYSERDA, talks to the media during a tour of the Luther Forest Technology Campus in Malta, NY on August 27, 2008.

Times Union staff photo by Lori Van Buren -- Mitchell Khosrova, Associate Counsel with NYSERDA, talks to the media during a tour of the Luther Forest Technology Campus in Malta, NY on August 27, 2008.

Photo: LORI VAN BUREN

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TIMES UNION STAFF PHOTO BY WILL WALDRON
Kenneth Green, President of Saratoga Economic Development Corp, right, celebrates the announcement of an AMD chip fabrication plant to be built on the Luther Forest Tech Park in Malta, with SEDC Senior Vice President Jack Kelley, center, and Jon Dawes, left, also from SEDC, during a press conference Friday afternoon June 23, 2006. less

TIMES UNION STAFF PHOTO BY WILL WALDRON
Kenneth Green, President of Saratoga Economic Development Corp, right, celebrates the announcement of an AMD chip fabrication plant to be built on the Luther Forest ... more

Photo: WW

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TIMES UNION STAFF PHOTO WILL WALDRON--Kenneth Green, President of Saratoga Economic Development Corp, right, is congratulated by SEDC Senior Vice President Jack Kelley, left, after making the announcement of an AMD chip fabrication plant to be built on the Luther Forest Tech Park in Malta, during a press conference Friday afternoon June 23, 2006. less

TIMES UNION STAFF PHOTO WILL WALDRON--Kenneth Green, President of Saratoga Economic Development Corp, right, is congratulated by SEDC Senior Vice President Jack Kelley, left, after making the announcement of an ... more

Photo: WW

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TIMES UNION STAFF PHOTO WILL WALDRON--Placards welcomed AMD to the Luther Forest Tech Campus in Malta during a press conference Friday afternoon June 23, 2006.

TIMES UNION STAFF PHOTO WILL WALDRON--Placards welcomed AMD to the Luther Forest Tech Campus in Malta during a press conference Friday afternoon June 23, 2006.

Photo: WW

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Times Union staff photo by Lori Van Buren -- From left, Mike Relyea, President of Luther Forest Technology Campus, Hector Ruiz, CEO and chairman of Advanced Micro Devices Inc. (AMD), Joe Bruno and Assemblyman Roy McDonald take a tour of the Luther Forest Technology Campus in Malta, NY on August 27, 2008. less

STEVE JACOBS / TIMES UNION , 10/7/08, Malta,NY-- AMD-- A road and forest near the site of the proposed AMD plant off Dunning Road, Tuesday, October 7,2008 ( FOR STORY) 4 of 13photos

STEVE JACOBS / TIMES UNION , 10/7/08, Malta,NY-- AMD-- A road and forest near the site of the proposed AMD plant off Dunning Road, Tuesday, October 7,2008 ( FOR STORY) 4 of 13photos

Photo: STEVE JACOBS

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PHILIP KAMRASS/TIMES UNION -- AMD's Steve Groseclose, left, listens to questions from members of the Town of Malta Planning Board after presenting AMD's plans for the $4.6 billion computer chip plant to them for the first time on Tuesday night at Town Hall in Malta, NY February 10, 2009. FOR LARRY RULISON STORY. less

PHILIP KAMRASS/TIMES UNION -- AMD's Steve Groseclose, left, listens to questions from members of the Town of Malta Planning Board after presenting AMD's plans for the $4.6 billion computer chip plant to them ... more

Photo: PHILIP KAMRASS

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PHILIP KAMRASS/TIMES UNION -- Members of the Town of Malta Planning Board look at AMD's plans for the $4.6 billion computer chip plant after they were presented to them by representatives of AMD for the first time, on Tuesday night at Town Hall in Malta, NY February 10, 2009. FOR LARRY RULISON STORY. less

PHILIP KAMRASS/TIMES UNION -- Members of the Town of Malta Planning Board look at AMD's plans for the $4.6 billion computer chip plant after they were presented to them by representatives of AMD for the first ... more

NYS Gov. David Paterson's hard hat slips off his head as he and other dignitaries break ground on GobalFoundries' $4.2 billion computer chip factory in Malta Friday July 24, 2009. From left are : Ibrahim ... more

Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times Union) less

Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times ... more

Photo: LORI VAN BUREN/TIMES UNION

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Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times Union) less

Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times ... more

Photo: LORI VAN BUREN/TIMES UNION

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Construction workers smooth out freshly poured concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported some of its employees by bus to the site to view the contruction site. (Lori Van Buren / Times Union) less

Construction workers smooth out freshly poured concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported some of its employees by bus to the site to view the ... more

Photo: LORI VAN BUREN/TIMES UNION

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Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times Union) less

Construction workers pour concrete at the Fab 2 site at Luther Forest in Malta, NY on September 9, 2009. GlobalFoundries transported its employees by bus to view the contruction site. (Lori Van Buren / Times ... more

Photo: LORI VAN BUREN/TIMES UNION

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Ironworkers install rebar before concrete is poured for sheer walls, part of the bracing for the building, at the GlobalFoundries Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The walls are 35 feet high. (Philip Kamrass / Times Union) less

Ironworkers install rebar before concrete is poured for sheer walls, part of the bracing for the building, at the GlobalFoundries Fab 2 Module 1 site chip fabrication plant under construction at the Luther ... more

Photo: PHILIP KAMRASS

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Brian Parlman, left, General Superintendent for M + W Zander, the general contractor, and Jason Gorss, right, of GLOBALFOUNDRIES, stand underneath pre cast "waffle" slabs that will be part of the floor of the clean room at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The holes in the slabs allow equipment and utilities to access the clean room. The floor will contain 924 of the 8 foot by 24 foot slabs, each weighing 48, 000 pounds. (according to Parlman and workers) (Philip Kamrass / Times Union) less

Brian Parlman, left, General Superintendent for M + W Zander, the general contractor, and Jason Gorss, right, of GLOBALFOUNDRIES, stand underneath pre cast "waffle" slabs that will be part of the floor of the ... more

Photo: PHILIP KAMRASS

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Brian Parlman, left, General Superintendent for M + W Zander, the general contractor, and Jason Gorss, right, of GLOBALFOUNDRIES, stand underneath pre cast "waffle" slabs that will be part of the floor of the clean room at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The holes in the slabs allow equipment and utilities to access the clean room. The floor will contain 924 of the 8 foot by 24 foot slabs, each weighing 48, 000 pounds. (according to Parlman and workers) (Philip Kamrass / Times Union) less

Brian Parlman, left, General Superintendent for M + W Zander, the general contractor, and Jason Gorss, right, of GLOBALFOUNDRIES, stand underneath pre cast "waffle" slabs that will be part of the floor of the ... more

Photo: PHILIP KAMRASS

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Gary Birch of Wilton, left, Colin Parkes of Middleburgh guide concrete into sheer walls 35 feet high that will serve as braces for the building, at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. (according to Parlman and workers) (Philip Kamrass / Times Union) less

Gary Birch of Wilton, left, Colin Parkes of Middleburgh guide concrete into sheer walls 35 feet high that will serve as braces for the building, at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication ... more

Photo: PHILIP KAMRASS

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Ironworkers install rebar before concrete is poured for sheer walls, part of the bracing for the building, at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The walls are 35 feet high. (Philip Kamrass / Times Union) less

Ironworkers install rebar before concrete is poured for sheer walls, part of the bracing for the building, at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther ... more

Photo: PHILIP KAMRASS

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A construction workers walks underneath pre cast "waffle" slabs that will be part of the floor of the clean room at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The holes in the slabs allow equipment and utilities to access the clean room. The floor will contain 924 of the 8 foot by 24 foot slabs, each weighing 48, 000 pounds. (according to M + W Zander) (Philip Kamrass / Times Union) less

A construction workers walks underneath pre cast "waffle" slabs that will be part of the floor of the clean room at the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the ... more

Photo: PHILIP KAMRASS

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Mike Braden, superintendent, stands on a noise mitigation berm overlooking the back of the GLOBALFOUNDRIES Fab 2 Module 1 chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Wednesday December 2, 2009. The clean room will be located on the right side where a blue lift is visible. (info according to M + W Zander ) (Philip Kamrass / Times Union) less

Mike Braden, superintendent, stands on a noise mitigation berm overlooking the back of the GLOBALFOUNDRIES Fab 2 Module 1 chip fabrication plant under construction at the Luther Forest Technology Campus in ... more

Brian Parlman, right, General Superintendent for M + W Zander, the general contractor, and Nathan Speanburg, Site Superintendent for M + W Zander, left, stand on a hill overlooking the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Tuesday February 9, 2010. (Philip Kamrass / Times Union) less

Brian Parlman, right, General Superintendent for M + W Zander, the general contractor, and Nathan Speanburg, Site Superintendent for M + W Zander, left, stand on a hill overlooking the GLOBALFOUNDRIES Fab 2 ... more

Photo: PHILIP KAMRASS

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Nathan Speanburg, Site Superintendent for M + W Zander, the general contractor, observes from his vehicle in the area below where the clean room will be , as work continues on the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Tuesday February 9, 2010. (Philip Kamrass / Times Union) less

Nathan Speanburg, Site Superintendent for M + W Zander, the general contractor, observes from his vehicle in the area below where the clean room will be , as work continues on the GLOBALFOUNDRIES Fab 2 Module 1 ... more

Photo: PHILIP KAMRASS

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Work continues on the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Tuesday February 9, 2010. The roof trusses shown will be above the facility's clean room. (Philip Kamrass / Times Union) less

Work continues on the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Tuesday February 9, 2010. The roof trusses shown will ... more

Photo: PHILIP KAMRASS

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A 26 foot high precast concrete column is lifted onto place in the area below where the clean room will be , as work continues on the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under construction at the Luther Forest Technology Campus in Malta, NY on Tuesday February 9, 2010. (Philip Kamrass / Times Union) less

A 26 foot high precast concrete column is lifted onto place in the area below where the clean room will be , as work continues on the GLOBALFOUNDRIES Fab 2 Module 1 site chip fabrication plant under ... more

Photo: PHILIP KAMRASS

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Construction continues on the computer chip factory at the GlobalFoundries site in Malta Friday morning April 2, 2010. (John Carl D'Annibale / Times Union)

Construction continues on the computer chip factory at the GlobalFoundries site in Malta Friday morning April 2, 2010. (John Carl D'Annibale / Times Union)

Photo: John Carl D'Annibale

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Construction work continues on the Chip Fab 8 GlobalFoundries plant in Malta, NY on Monday, May 3, 2010. (Paul Buckowski / Times Union)

Construction work continues on the Chip Fab 8 GlobalFoundries plant in Malta, NY on Monday, May 3, 2010. (Paul Buckowski / Times Union)

Photo: PAUL BUCKOWSKI

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Exterior of GlobalFoundries in Malta, NY on October 25, 2010. (Lori Van Buren / Times Union)

Exterior of GlobalFoundries in Malta, NY on October 25, 2010. (Lori Van Buren / Times Union)

Photo: Lori Van Buren

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Construction on the Global Foundries new chip fab plant in Malta,New York 03/03/2010.(Michael P. Farrell/Times Union)

Construction on the Global Foundries new chip fab plant in Malta,New York 03/03/2010.(Michael P. Farrell/Times Union)

Photo: MICHAEL P. FARRELL

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Norm Armour, vice president and general manager of Fab 8, right, during a news conference to open a GlobalFoundries test lab on Wednesday, Oct. 27, 2010, in Malta, N.Y. (Cindy Schultz / Times Union)

Norm Armour, vice president and general manager of Fab 8, right, during a news conference to open a GlobalFoundries test lab on Wednesday, Oct. 27, 2010, in Malta, N.Y. (Cindy Schultz / Times Union)

Construction on the areaway between the fab, left, and the central utility building on Wednesday, Jan. 5, 2011, at GlobalFoundries in Malta, N.Y. (Cindy Schultz / Times Union)

Construction on the areaway between the fab, left, and the central utility building on Wednesday, Jan. 5, 2011, at GlobalFoundries in Malta, N.Y. (Cindy Schultz / Times Union)

Photo: Cindy Schultz

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Allen Cullion, General Superintendent for M + W Group, left, Travis Bullard, center, and Jessica Shahda, right, both of GlobalFoundries, stand inside part of the administration building of the new GlobalFoundries chip fabrication plant under construction on Thursday April 7, 2011 in Malta, NY. A giant logo of GlobalFoundries will be on a wall facing the windows behind them. (Philip Kamrass/ Times Union ) less

Allen Cullion, General Superintendent for M + W Group, left, Travis Bullard, center, and Jessica Shahda, right, both of GlobalFoundries, stand inside part of the administration building of the new ... more

Photo: Philip Kamrass

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Local 12 ironworker Bill Carr of Massachusetts, left, and Brian Dunphy of Baltimore, MD (a non union worker) right, work on a railing inside part of the administration building of the new GlobalFoundries chip fabrication plant under construction on Thursday April 7, 2011 in Malta, NY. A giant logo of GlobalFoundries will be on a wall facing the windows behind them, at right. (Philip Kamrass/ Times Union ) less

Local 12 ironworker Bill Carr of Massachusetts, left, and Brian Dunphy of Baltimore, MD (a non union worker) right, work on a railing inside part of the administration building of the new GlobalFoundries chip ... more

Photo: Philip Kamrass

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Local 12 ironworker Bill Carr of Massachusetts, left, and Brian Dunphy of Baltimore, MD (a non union worker) right, work on a railing inside part of the administration building of the new GlobalFoundries chip fabrication plant under construction on Thursday April 7, 2011 in Malta, NY. A giant logo of GlobalFoundries will be on a wall facing the windows behind them, at right. (Philip Kamrass/ Times Union ) less

Local 12 ironworker Bill Carr of Massachusetts, left, and Brian Dunphy of Baltimore, MD (a non union worker) right, work on a railing inside part of the administration building of the new GlobalFoundries chip ... more

Photo: Philip Kamrass

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Allen Cullion, General Superintendent for M + W Group, left, and Travis Bullard, right, of GlobalFoundries, walk through part of a partially completed clean room of the new GlobalFoundries chip fabrication plant under construction on Thursday April 7, 2011 in Malta, NY. Beyond the curtained wall at rear is another part of the clean room in a more advanced state of completion, but photographs were not allowed. (Philip Kamrass/ Times Union ) less

Allen Cullion, General Superintendent for M + W Group, left, and Travis Bullard, right, of GlobalFoundries, walk through part of a partially completed clean room of the new GlobalFoundries chip fabrication ... more

Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at ... more

Photo: Lori Van Buren

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Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at ... more

Photo: Lori Van Buren

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Inside The Foundry at Globalfoundries in Malta, NY on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

Inside The Foundry at Globalfoundries in Malta, NY on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds ... more

Photo: Lori Van Buren

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Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

Inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at ... more

A huge cake sits waiting to be cut for workers inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

A huge cake sits waiting to be cut for workers inside The Foundry, at Globalfoundries in Malta, NY, during lunch time on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of ... more

Photo: Lori Van Buren

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Angelo Mazzone stands next to a huge cake inside The Foundry at Globalfoundries in Malta, NY on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site dining dome at Globalfoundries. It feeds 1,000 meals a day. (Lori Van Buren / Times Union) less

Angelo Mazzone stands next to a huge cake inside The Foundry at Globalfoundries in Malta, NY on February 15, 2011. Angelo Mazzone Catering is celebrating the one-year anniversary of The Foundry, the on-site ... more

US Senator Charles Schumer holds up two types of "chips" he hopes Saratoga County will be famous for during ground breaking ceremonies for GobalFoundries' $4.2 billion computer chip factory in Malta Friday July 24, 2009. (John Carl D'Annibale / Times Union) less

US Senator Charles Schumer holds up two types of "chips" he hopes Saratoga County will be famous for during ground breaking ceremonies for GobalFoundries' $4.2 billion computer chip factory in Malta Friday ... more

Photo: John Carl D'Annibale

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PHILIP KAMRASS/TIMES UNION -- AMD's Hector Ruiz, gesturing, speaks during a press conference in the Red Room in the Governor's offices in the Capitol to announce news for a chip fab manufacturing plant in Saratoga County, Tuesday October 7, 2008. Left to right are Assemblyman Roy McDonald, US Senator Charles Schumer, former State Senator Joseph Bruno, Governor David Paterson, Ruiz, US Senator Hillary Clinton and Assembly Speaker Sheldon Silver. Assemblyman Jim Tedisco is at far right, mostly obscured. less

PHILIP KAMRASS/TIMES UNION -- AMD's Hector Ruiz, gesturing, speaks during a press conference in the Red Room in the Governor's offices in the Capitol to announce news for a chip fab manufacturing plant in ... more

Times Union staff photo by Cindy Schultz
Politicians applaud during the Advanced Micro Devices Inc. (AMD) news conference on Friday, June 23, 2006, at CESTM in Albany, N.Y. AMD will build a computer chip fab plant in Luther Forest in Stillwater. From left are John Sweeney, Sheldon Silver, Ron Canestrari, Joseph Bruno and Robert Riley. Joining them are Hector Ruiz, CEO and chairman of AMD, right. less

Times Union staff photo by Cindy Schultz
Politicians applaud during the Advanced Micro Devices Inc. (AMD) news conference on Friday, June 23, 2006, at CESTM in Albany, N.Y. AMD will build a computer chip ... more

CINDY SCHULTZ/TIMES UNION -- Former Sen. Joseph Bruno, left, entertains the audience with his comments during the announcement of AMD plans on Wednesday, Oct. 8, 2008, at the Luther Forest Technology Campus in ... more

Five years ago, when New York state political leaders were vying for a computer chip factory that would later become GlobalFoundries' $4.6 billion Fab 8 project in Saratoga County, they were competing against the rest of the world for the facility, which is why they offered a whopping $1.4 billion in incentives.

That included a $665 million cash grant, unprecedented in U.S. history. Mostly because of higher taxes, it can cost $1 billion more to build a chip fab in this country than in others.

But an analysis of the deal and interviews with experts on government subsidies suggest what the public may not know: The GlobalFoundries arrangement was one of the biggest taxpayer handouts ever offered to a private enterprise in the United States and the state is taking a huge risk its bet will pay off.

Kenneth Thomas, a University of Missouri-St. Louis professor who has spent years tracking government subsidies, ranked the largest U.S. economic development deals dating back to 1999 in his 2010 book "Investment Incentives and the Global Competition for Capital."

More Information

New York's 2006 offer to Advanced Micro Devices Inc., which spun off its manufacturing operation in 2009 to create GlobalFoundries in a joint venture with the government of Abu Dhabi, ranks second.

"Large cash grants are unusual in the United States," Thomas said. "The GlobalFoundries grant is the largest ever given in the U.S."

New Yorkers are paying roughly $25 million a year -- or a total of $1.05 billion through 2040 -- on the debt service for the bonds Empire State Development Corp. issued to pay for the project.

Including roughly $700 million in tax breaks, the GlobalFoundries subsidy may be a high price to pay to a company that needs produce only 1,465 jobs to comply with the terms negotiated with the state -- roughly $1 million per job.

New York faced high odds in landing the GlobalFoundries project, which like most chip manufacturers has global operations with fabs in Germany and Singapore, and one being developed for Abu Dhabi.

The Semiconductor Industry Association says the lack of a permanent and competitive federal research and development tax credit is one reason states like New York have their hands tied.

Countries such as China, Singapore, Brazil and Malaysia and even Russia offer so-called "super deductions" for R&D that can total 150 percent or more of a company's research spending.

"Companies looking to develop manufacturing facilities in the U.S. are faced with an uneven playing field as other countries and regions have adopted competitive policies and financial incentives aimed at attracting these facilities outside the U.S.," said GlobalFoundries spokesman Travis Bullard, who says a mix of hefty tax breaks and cash incentives can tip the scales.

Israel has also been very aggressive in handing out incentives to the semiconductor industry and has offered cash subsidies on a par with New York. Intel has received $700 million from Israel for its Kiryat Gat fab. And the country provided $200 million to Intel for upgrades in 2010, according to a spokesman for Israel's Ministry of Industry, Trade & Labor.

The fact that New York paid a lot for GlobalFoundries doesn't mean the deal will ultimately benefit the state. In addition to the cost of the cash grant, New York has agreed to forgo hundreds of millions of dollars in tax revenue over the next decade, albeit on business spending that likely wouldn't have happened if Fab 8 were not built.

The state is betting that those corporate taxes will be replaced by new revenues flowing into the state treasury from thousands of new jobs and from companies flooding into the area to feed off GlobalFoundries.

Greg LeRoy, executive director of Good Jobs First, a Washington, D.C., watchdog group that tracks corporate subsidies, says at $1 million per job, recouping the state's investment will be especially difficult because high-tech product life cycles are short compared to other industries.

"It would obviously take many, many years for the state to break even fiscally, if it ever does," LeRoy said.

The state's own analysis of the deal by ESDC confirms that the state's cost per direct job at GlobalFoundries is $1 million. The analysis shows that on the surface the deal is a bad one for the state, with a mere $288 million in added revenue for both state and local governments over seven years.

But the total economic benefits to the state -- both added tax revenue and added disposable income -- would total $1.7 billion over that same time, $2.54 for each $1 spent by the state, the analysis shows.

Still, even GlobalFoundries says the true impact won't be known for as long as 20 years.

"The fact that New York state was willing to put down that investment was a powerful thing, but it's tough to quantify," said Bullard.

Thomas says $1 million per job is high for even the semiconductor industry, and he said that New York's subsidies for IBM and Sematech are also high by industry standards.

In contrast, Texas paid $190,000 per job to get Samsung to build a second fab in Austin in 2006, and the cost of a silicon wafer manufacturing plant in Michigan cost that state $284,000 per job, Thomas says.

"New York looks much higher than other states," he said.

New York's semiconductor subsidies also have a high percentage of state aid in relation to the amount of private capital that's brought to the table, which means New York is shouldering more risk than others when attracting high-tech industries, Thomas found.

Josh Lerner, an investment banking professor at Harvard Business School, says there is a serious risk of a state like New York paying too much on incentives, especially in the tech sector.

"It seems very likely that they would have been more successful had they instead focused on addressing the environmental issues that discouraged entrepreneurship there in the first place, including high marginal tax rates," Lerner said.

Ken Adams, the new head of ESDC under Gov. Andrew Cuomo, says that going forward, the state's high-tech deals will require larger amounts of private capital -- the goal is for between $5 and $10 in corporate investment for every $1 in state aid. And the deals will also be structured to ensure the state investment remains in New York.

"You can't come to New York and stick your hand in the cookie jar and take whatever you want," Adams said. "We have to put a very important emphasis on leverage."